2nd December Market Report

Global equity futures closed with a mildly positive bias, while Indian benchmarks ended slightly lower and crypto continued to outperform, signalling a risk-on undertone despite selective profit booking in equities.

Global index futures

US index futures edged higher with US500 around 6,842.5 (+0.17%), US30 near 47,577 (+0.20%) and NAS100 around 25,604.8 (+0.17%), indicating steady buying interest after recent gains. European futures like FCE1! and FDAX1! also posted modest advances, while Asian contracts were mixed with strength in KOSPI (+1.04%) offset by pressure in Hang Seng and China-linked futures, hinting at continued regional divergence. Technically, US futures remain above key medium-term moving averages with RSI in the neutral-to-bullish zone, suggesting an ongoing uptrend but with limited momentum in the short term. Fundamentally, expectations of a soft-landing narrative in the US and resilient corporate earnings continue to support global risk assets, though valuations are now rich and sensitive to any negative macro surprise.

Forex market

In FX, EURUSD closed near 1.1657 (+0.30%), GBPUSD around 1.3285 (+0.57%), while USDJPY eased to 155.545 (‑0.20%) and USDINR firmed near 90.1820 (+0.35%), reflecting broad dollar consolidation with a mild bid for high-beta currencies. Technically, EURUSD and GBPUSD are attempting to build higher lows above recent supports with improving momentum, whereas USDJPY showing minor corrective weakness after an overextended rally keeps intraday resistance intact. On the fundamental side, FX moves remain driven by shifting expectations on Fed and ECB policy convergence, while for INR, robust domestic growth and persistent portfolio flows are helping offset global risk concerns despite an overall strong dollar backdrop.

Cryptocurrency

Bitcoin closed near 93,372.33 (+2.26%), Ethereum around 3,069.4 (+2.42%), DOGE modestly higher and LTC/SOL also gaining, extending the recovery from the recent corrective low in the broader crypto basket. Technically, BTCUSD is trading back above the 90,000 support zone with price rebounding from a short-term downtrend, though it still lingers below key EMAs on the daily chart, indicating a relief rally within a broader consolidation phase. Fundamentally, renewed institutional interest, ongoing ETF inflows and improving risk sentiment are supporting major coins, but elevated leverage and macro-sensitive liquidity conditions keep downside volatility risks elevated for traders.

Sensex and Nifty continue to reflect India’s solid macro backdrop, with GDP growth trending above 8% and inflation sharply moderated near the lower end of the RBI’s target band, supporting real income growth and corporate demand. Even as the benchmarks see intermittent bouts of profit booking and weak breadth due to FII risk-off phases, the underlying earnings cycle remains constructive, aided by healthy credit growth, government-led infrastructure spending, and robust domestic consumption, particularly through rising SIP-driven DII flows. Valuations for the large-cap universe are elevated versus long-term averages but are partially justified by superior earnings visibility, India’s upgrade to the world’s fourth-largest economy, and a relatively strong fiscal and banking system; however, this also means fresh index-level upside is likely to be more measured and driven by selective sector and stock performance rather than broad-based re-rating.

Indian sectoral indices

Sectorally, CNXFMCG slipped about 0.80%, CNXPSU corrected sharply by roughly 3.07%, and NIFTY Mid/other broad indices like CNXINF, CNXMET and CNXREA also closed in the red, while CNXFIN and CNXIT managed modest gains, highlighting rotation away from PSUs and cyclicals into financials and IT. Technically, several sector indices have slipped below their short-term moving averages with momentum oscillators cooling from overbought territory, pointing to a healthy mean-reversion after a strong multi-week rally. From a fundamental angle, profit booking in PSU and commodity-linked names follows an extended run-up and rich valuations, whereas financials and IT continue to benefit from stable credit growth, benign asset quality and improving global tech spending expectations.

Indian headline indices

Headline indices closed soft, with Nifty 50 at 25,986 (‑46.20, ‑0.18%), Sensex at 85,106.81 (‑31.46, ‑0.04%) and Bank Nifty futures near 59,348.25 (+74.45, +0.13%), showing mild consolidation after recent highs with relative outperformance in banking. Technically, Nifty is hovering just above the 26,000 support band and still trading above its 50‑ and 100‑day moving averages, indicating that the primary uptrend remains intact even as intraday indicators signal fatigue and the need for further time-wise correction. Fundamentally, steady domestic macro data, resilient earnings and strong SIP/fund flows continue to underpin the market, but stretched valuations and global rate uncertainties warrant a selective, stock-specific approach rather than aggressive index chasing at these elevated levels.

For today’s trade setup, the key focus is on a cluster of labor, inflation and activity data across the US, Eurozone and India that could influence risk sentiment and currency moves. Below is a concise view of the most relevant/high-impact events and announcements around the current session (India afternoon on 3 December, rolling into 4 December 2025).

United States

• Weekly labor data remain in focus with Initial Jobless Claims and Challenger Job Cuts due, alongside regular updates on the US trade balance and exports–imports, which will shape views on growth momentum and Fed policy trajectory.
• Through the week, markets are also watching business surveys (ISM/PMI, factory orders) and inflation-related releases plus Fed speakers, as any hint of slowing growth or softer prices can reinforce expectations of an extended pause or eventual rate cuts, impacting US yields, dollar strength and global risk assets.

Euro Area

• The Eurozone calendar features Retail Sales and producer price data along with scheduled ECB speeches, coming on the back of recent GDP figures that showed only modest 0.2% quarterly growth and inflation hovering just above the 2% target.
• These releases are important for gauging how quickly demand is normalising and whether the ECB can maintain a prolonged policy hold; any upside surprise in sales or prices may limit scope for further easing, while weaker prints can pressure the euro and support risk-on trades in peripheral assets.

India

• For India, the near-term calendar highlights industrial and manufacturing production numbers and external sector indicators such as the current account, which help confirm whether the recent strong GDP prints above 8% are broad-based and sustainable.
• At the same time, softening CPI inflation alongside robust GST collections keeps the focus on upcoming RBI commentary, where a stable policy rate with a growth-supportive tone is expected; any deviation could quickly affect bond yields, INR and interest-rate sensitive sectors in the equity market.
  
  USDINR extended its slide with the rupee weakening beyond the 90-per-dollar mark, making fresh record lows near 90.2–90.3 as persistent FPI outflows, delays in the India–US trade deal, a wide trade deficit and strong dollar demand from importers continued to pressure the currency despite episodic RBI intervention. The sharp depreciation, coming even after robust 8%+ GDP growth, has boosted export-oriented IT and pharma earnings prospects in rupee terms but simultaneously raised imported inflation risks for energy, electronics and other dollar-linked inputs.
• On the equity side, top-performing segments around the latest session were IT, telecom and broader TECK, which gained roughly 0.6–0.9% as investors rotated into export-heavy and digital names that benefit from a weaker rupee and resilient global tech spending. Individual outperformers highlighted in these spaces included Route Mobile and Indus Towers in telecom/TECK and select IT names such as Wipro, TCS and Infosys, which advanced up to about 2% and helped cushion headline indices from a deeper decline.
• FII–DII flow data for 2 December show that Foreign Institutional Investors were net sellers of roughly ₹3,300–3,600 crore in the cash market, while Domestic Institutional Investors absorbed this supply with strong net buying to the tune of about ₹4,300–4,650 crore, marking a sizeable divergence between foreign risk-off positioning and domestic conviction. This pattern, along with evidence that FIIs also cut index futures longs and added shorts, underlines how domestic flows and SIP-led liquidity are currently acting as the main stabiliser for Indian equities even as currency markets price in external vulnerabilities.

RBI interventions and FX Reserve
RBI has been intermittently selling dollars in the spot and forwards market around the 89.7–90.3 band to slow the rupee’s slide, but it is deliberately avoiding a hard line in the sand and instead focusing on smoothing volatility rather than defending a specific USDINR level. Traders reported RBI offers near 89.7 on 1 December and again just below 90 on 2 December, which briefly pulled USDINR back from intraday highs, yet the scale of intervention has been described as “sporadic” and “limited,” allowing market forces and FPI outflows to gradually push the pair beyond the psychological 90 mark.

On the reserves side, India’s FX stockpile has dipped as the central bank leans on its war chest, with headline reserves falling by about 4.4–4.5 billion dollars in the week ended 21 November to roughly 688.1 billion, driven largely by a drop of over 2.6 billion in gold holdings and a decline in foreign-currency assets. Latest high-frequency data show reserves oscillating around the 688–693 billion range through late November, implying that RBI still has substantial firepower but is choosing a calibrated approach—using reserves to curb disorderly moves while signalling tolerance for some depreciation to reflect external pressures and preserve competitiveness.

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